New Survey Identifies Barriers to Blockchain Development

Executives at the vast majority of organizations (84%) say that their firms have at least dabbled with blockchain technology. Nearly a third have applications currently in development, 10% say they have reached the pilot stage and 15% have implemented blockchain technology.

The sector that has been most aggressive in blockchain development is financial services. In 2017, 82% of reported blockchain use cases were in the financial services sector. In 2018, that percentage dropped to 46% but the sector still far outdistances the industrial and manufacturing (12%), energy and utilities (12%) and health care (11%) sectors.

The data was reported by consulting firm PricewaterhouseCoopers (PwC) based on a survey of 600 executives in 15 locations around the world.

Ironically, perhaps, one of the primary benefits of blockchain is also one of the highest hurdles the technology must overcome. That issue is trust. A blockchain does not require a central authority to provide trust; rather trust is based on a decentralized database that automatically tracks transactions and guarantees their veracity. But can the decentralized system itself be trusted?

According to the PwC survey, 45% of respondents list lack of trust among users as one of the four biggest barriers to blockchain adoption:

[U]sers must build confidence in the technology itself. As with any emerging technology, challenges and doubts exist around blockchain’s reliability, speed, security and scalability. And there are concerns regarding a lack of standardisation and the potential lack of interoperability with other blockchains.

And lack of trust is only the second most-often expressed concern. Regulatory uncertainty is named by 48% of respondents as the highest barrier to blockchain adoption.

Respondents also listed the ability to bring together a blockchain network (44%) and the lack of interaction between different blockchains (41%) as the other main barriers to adoption:

It is perhaps ironic that a technology meant to bring consensus hits a stumbling block on the early need to design rules and standards. Take payment systems and mechanisms in banking. Though everyone plays by the rules of existing systems today, they don’t necessarily agree on how an alternative blockchain-based model should be designed and operated.